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Are Precious Metals and Indexes Going Parabolic?

It’s been an exciting couple weeks in the market with gold now making new all time highs as money floods into this shiny safe haven. It has everyone all worked up wanting to take part or they are riding the rally up already. But the big question is when should some money be taken off the table to lock in gains and lower your overall risk during these crazy times?

Below are a few charts showing you how I see things at this time.

GLD – Gold Exchange Traded Fund
The price of GLD and gold appear to be going parabolic (straight up). The tough part about this type of price action is that large moves can happen in a very short period of time. But on the flip side, when the price reverses we tend to see prices fall just as fast if not faster. Trading this type of price action carries a very high level of risk. Those chasing it up buying at these overbought market conditions is a double edge knife.

ETF Trading Newsletter

SLV – Silver Exchange Traded Fund
Silver is trading similar to gold but the key difference here is that silver has not broken to a new high as of yet. The high was set in 2008 just over $20 per ounce. But from looking at the chart I think metals are ready for a breather.

Silver ETF Trading Newsletter

HUI Index – Gold Stocks
Gold stocks have yet to breakout along with silver as they both are nearing key resistance levels. With gold stocks and silver trading near resistance I figure we will see pause in the coming days as traders digest the recent strong moves up taking some money off the table incase prices get stuck under these resistance level.

Gold Stock Trading Newsletter

SPY – SP500 Broad Market Exchange Traded Fund
The broad market appears to be forming a possible short setup on the daily chart as the price continues to drift higher with declining volume. Also indexes are testing key resistance levels and the 10 period moving average. The next few days should be interesting…

SPY ETF Trading Newsletter

Mid-Week Precious Metals and Index Exchange Traded Fund Report:
In short, it looks like precious metals and the broad market could take a breather in the coming days. I’m not sure how large of a correction we will see but I do not think it will be all that big.

Gold and silver should have a quick dip with buyers stepping back in on weakness. The SP500/broad market is a little more tough to call as last weeks market crash messed things up washing out all the stops in one day instead of weeks… but we could easily see a 5% drop in the market still.

Anyways I hope this analysis helps everyone…

Check out my trading services at: www.TheTechnicalTraders.com

Chris Vermeulen

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How to Trade ETF Fund for Gold, Silver, Oil and Natural Gas

So far this week has been slow in regards to commodity etf funds. Gold continues to shine while silver refuses to make a move higher. Crude oil has a nice bull flag and we are waiting for a breakout and setup while natural gas continues to see selling pressure.

ETF Trading Tip: Waiting for these exchange traded funds to generate low risk setups and watching our current positions mature is the boring part of trading. It’s these slow times when traders get bored and start taking more risk by entering positions that do not have clear entry and exit points. Not having clear entry and exit points will lead to traders holding on to losing trades and not taking profits on winning trades. Be sure you enter positions which you know where you should get out if the trade goes against you and where to take some money off the table if it rallies higher.

GLD ETF Trading – Daily ETF Chart
The gold etf fund looks to be in rally mode which means when traders start to take profits we should see a sharp reversal down.

ETF Trading

ETF Trading

SLV ETF Trading – Daily ETF Chart
Silver has been under performing gold for several weeks now. I think this is because gold is the safe haven of choice be traders and investors. That being said silver generally leads gold so this is giving me a red flag. A larger correction in precious metal ETF prices could be just around the corner. But until we see a technical breakdown on the charts we are staying long.

Trading ETF Funds

Trading ETF Funds

USO Fund Trading – Daily Fund Chart
The USO oil fund broke out a few weeks ago from the large pennant pattern. The price has been flagging for about 3 weeks now. It looks like we are getting close to a low risk setup so I am keeping a close eye on this fund.

ETF Trader

ETF Trader

UNF Fund Trading – Daily Fund Chart
Natural gas continues to under perform the rest of our commodities. This fund is starting to look like another good by point but we need a few things to fall into place before that happens. Let’s not jump the gun because this fund is still in a bear market. Waiting for a setup.

How To Trade ETF Funds

How To Trade ETF Funds

ETF Trading Conclusion:
We continue to wait for trading opportunities to unfold. We focus on taking advantage of low risk setups and avoiding times the market when things are choppy and unclear.

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Chris Vermeulen